Regulatory gimmick just might work

Donald Trump promises to impose, soon after his inauguration, a new requirement on federal agencies: If they want to issue a new regulation, they have to rescind two regulations that are now on the books.

The idea of "one in, two out" has rhetorical appeal, but it's going to be extremely hard to pull off.

In the abstract, of course, it sounds like a gimmick, and it's a pretty dumb idea. As presidents from Ronald Reagan to Barack Obama have recognized, the real question is whether regulations, whether new or old, are justified.

It follows that the right approach is not "one in, two out" but a careful check on issuing new rules, with the help of cost-benefit analysis – accompanied by an ambitious program to scrutinize rules on the books to see if they should be scrapped. The Trump administration doesn't need a gimmick to make progress on both fronts.

Help us deliver journalism that makes a difference in our community.

Our journalism takes a lot of time, effort, and hard work to produce. If you read and enjoy our journalism, please consider subscribing today.

But life isn't lived in the abstract. It's reasonable for the Trump administration to reduce regulatory activity, certainly in some domains, and the "one in, two out" idea is likely to deter new rulemaking – which may be the main goal. It's also reasonable to create a strong incentive for agencies to get rid of unjustified rules.

But which regulations might be eliminated? Would any do? Surely not.

If you're imposing $1 billion in costs but eliminating two regulations whose total cost is $10,000, you get "one massive rule in, two tiny rules out" – hardly what Trump has in mind. What most matters is the cost of rules, not the number. For the private sector, a dozen inexpensive rules may not be a big deal, while two that cost more than $1 billion might be a horror show.

So it's tempting to say that whenever a regulator is issuing an expensive new rule, it must eliminate two that cost at least as much as it does. The problem is that within the next year, one agency or another (headed by a Trump appointee, after all) is going to want to issue a rule that costs more than $100 million (say, to reduce the risk of illegal immigration), and it just won't be able to come up with two expensive rules that it makes sense to eliminate.

The best way to solve that problem is for Trump to give someone in the White House – most likely the head of the Office of Information and Regulatory Affairs – the authority to waive the "one in, two out" idea after a compelling showing of need.

In theory, "one in, two out" is silly, and in practice it's likely to be a bit of a mess. But with a little flexibility, and a lot of determination, executive branch officials might be able to make it work.

Cass R. Sunstein is director of the Harvard Law School's program on behavioral economics and public policy.